Payment clearance time at banks

[phildesign]

Why does it take banks between 3 and 5 days to clear payments between accounts, even though it might be done electronically via online banking? I can understand physical cheques needing to have time to be processed, but surely not electronic payments? It would appear the banks still want to make millions daily on interest while these payments are "in limbo"...

[magicdice]

yeah they make interest on it, most people aren't too bothered about their money coming through 3 to 5 days later than it was sent because it's standard really, so why shouldn't they? apart from the fact that it's our money, of course. *grumble grumble*

[secretspirit]

I have to say that I've never had that problem with HSBC. Normally payments in or out are credited or debited that same day. I had an accounts with Lloyds TSB though and they were terribly slow.

[AlanS107]

Because the banks make a lot of money investing the cash whilst it is in limbo. The government have threatened the banks that they must improve transfer times and there is a joint project by the banks at the moment to bring in a new system to give almost immediate turn around, as in Sweden. However, the project has been going on for a long time and the suspicion is that the banks are dragging their heels. Hence the warning. The rumour is that something will happen later this year.

[stevie21]

If it upsets you that much then use CHAPS payments which are sent and received the same day.
Part fo the reason I've been told that these payments take the time that they do is that when they were introduced they were aligned with cheque clearance. Not the most convincing justification in the world, eh?
Either way, the money isn't sent directly from one bank to another - it goes via a clearing house (as do cheques) so lets all blame them for the delay.

The best reason I can think of for leaving them at 3-5 working days is to fight fraud. If I see a fraudulent transfer from my bank which went out yesterday then I can contact the receiving bank and tell them not to allow the �9000 to be spent once it arrives in a day or two.